Hotel-motel tax shot down in Iowa House

UNDATED (KTIV) -- A proposed bill in the Iowa House that would let cities and counties raise their hotel-motel tax is dead. The bill would have allowed a two-percent increase in the tax.

Opponents of the bill worried that it would hurt business in an industry that's already been hit hard by the economy.

Spirit Lake Representative Mike May owns a resort in the Iowa Great Lakes and says, while there's no good time to raise taxes in the hospitality business, now would have been especially bad.

"This is an enormously important industry to us in Iowa and they have been hit unduly hard by the recession. People don't have to travel, they don't have to go places and the higher the prices of the rooms, the less they're going to stay," May said.

May says the higher taxes would have hurt Iowa's chances at attracting conventions because those booking events, also take the tax into account.